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A catastrophic event happens: Government Looks for Corporations to Shake Down

After Sierra Pacific opened its pocketbook, evidence began emerging that the settlement was based on improper prosecutorial withholding of key information, and even straight-up lies. By October 2014, after Sierra had delivered $29 million of its settlement to the Department of Justice (DOJ), the company was asking the District Court to void the agreement due to “fraud upon the court.” The alleged fraudsters’ motive? To secure a financial windfall for both the state and the federal government.
While such post-facto complaining might sound par for the course from expensive corporate defense attorneys, the charges had enough merit to stop the state-level lawsuit in its tracks and send shockwaves throughout the Golden State’s legal system. In February 2014, Plumas County Judge Leslie C. Nichols found that the California Department of Forestry and Fire Protection and the California attorney general’s office, which jointly investigated the fire with the DOJ, engaged in “egregious and reprehensible conduct” in the case, failing to turn over thousands of pages of documents indicating that several other people could be responsible for the fire-people who lacked Sierra’s deep pockets. Also revealed in a 2013 audit: For years, Cal Fire had been secretly and illegally stashing money from settlements in a nonprofit under its control rather than depositing it in California’s general fund. According to Sierra Pacific’s filings, Cal Fire demanded a check for $400,000 for this fund as part of a settlement offer.